BUDGET WISH LIST: CST on petro products be reduced to 1%, says firms

“Putting petroleum products under the ambit of GST will have been a major tax reform. The govt should reduce central sales tax to 1%, in line with the proposed Constitutional Amendment Bill for GST, before eventually making it zero”

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EXPERT VIEW

Business Standard had invited readers’ queries on the Budget for 2015-16. A PwC expert answers key questions

Deepak Mahurkar, partner & leader (Oil & Gas), PwC India

What can salaried individuals expect for the oil & gas sector from the Budget? — Sumit Bansal

Decontrol of diesel and petrol prices is expected to induce competition in fuel retailing. Consumers will benefit by up to 10% in the near term, with a combination of quantity and price check. Targeted LPG and kerosene subsidy will save hundreds of crores of rupees for the exchequer, boosting developmental spending with mid- and long-term benefits for the common people.

What happens to Nelp-IV? How do we go about the much-hoped increase in gas production? — Ramachandra V Sakhadeo

The govt appears to be committed to improving operations by debottlenecking decisions. The gas price decision and guidelines for obtaining approvals provided recently also appear to be in the direction of building operator confidence. The intent seems to enhance production in the already-awarded acreages and in the pre-Nelp blocks. The govt is expected to now embark on the next action of new acreage awards. The Directorate General of Hydrocarbons has announced the proposed acreages. The ongoing consultation with stakeholders might result in award policy changes. As is inherent in the exploration and production sector, the positive outcomes of policies take about a decade, so gas production increase as a result of the changes might come in the medium term — more certainly in the long term.

Is the fall in global crude oil prices good for the Indian economy, irrespective of the extent of decline? — Rahul Dogra

The crude oil price drop is good for the Indian economy on all counts. Saving of foreign exchange outgo, reduced cost of fuels for consumers, enhanced exchequer earnings with the adopted fiscal policy of increasing excise duty, better fiscal deficit and trade deficit situation, and many such benefits will accrue. Some of these are such large benefits that the Indian economy might turn around.